The Federal Work Study program (FWS) allocates $1 billion each year to colleges who in turn subsidize jobs for 1.5 million students working their way through school. Ideally, FWS would help low- and middle-income students cover tuition, books, room, and board while providing valuable work experience. But reality looks very different. The current funding formula fails to target the neediest individuals or properly incentivize colleges to prepare students for future employment. President Obama recently outlined a plan to double FWS grants to schools, but in exchange, the institutions would have to curb tuition growth, better target student aid, and increase graduation rates. As policymakers consider these reforms to campusbased aid, they should also look to completely replace the FWS funding formula. Specifically, in addition to encouraging schools to graduate students and curb tuition growth, we should at the same time:

• Eliminate the reward for longevity in the program;
• Determine need for FWS based on a student’s income, not the school’s cost; and
• Strengthen the work experience requirement.
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